Difficult road for Kosovo

Experts say a new state could struggle to build economic infrastructure.

23 Feb 2008 09:35 GMT

The ethnic Albanian majority has been demanding independence since a Serbian crackdown against separatists in 1999 [GALLO/GETTY]

Giant red signs outside a local hotel in Pristina, the capital of Kosovo province, reflect the prevailing mood among the ethnic Albanian majority.

"Welcome to the newborn country," they read in bold, black letters.

Expectations are high that the government of Kosovo will declare independence from Serbia within days, backed by the US and many European countries.

Though no official date has been set for an official announcement, Pristina is awash with fluttering Albanian flags and posters with the word Kosovo at the center of a bright red heart.

For Kosovo's ethnic Albanian majority, who will celebrate the day with a giant cake, a new monumental sculpture and street parties, the declaration itself is a symbolic moment that marks the end of more than nine years of uncertainty.

But independence is likely to be a process and one that is longer and bumpier than many had hoped.

UN administration

Kosovo has operated under UN administration since 1999 after the Nato bombing campaign repelled Serb forces conducting a crackdown on ethnic Albanian separatists.

"Kosovo needs rapid economic growth to deal with the fact that there are 30,000 new people entering the job market every year"

Elinor Bajraktari, an economist with the EU component of the UN mission in Kosovo

Although the province remained formally part of Serbia, the UN helped establish separate political and economic institutions there. Today, Kosovo has many of the trappings of a state, including its own assembly, car licence plates, schools and police service.

But after nine years of international administration, Kosovo's ethnic divides remain stark and these new institutions are not accepted and used by all Kosovans. The country's Serbian minority, especially those who live north of the Ibar River, have largely rejected the authority of the Kosovo government.

Serbian civil servants, such as doctors and teachers, still receive pay cheques from the Serbian government in Belgrade, unlike their ethnic Albanian counterparts. They use Serbian dinars for currency instead of the euros used throughout Kosovo.

Their telephone communications are linked to the Serbian mobile network.

Symbol of division

Mitrovica, Kosovo's second-largest city, is the most visible symbol of this division.

South of the Ibar River, the population is largely ethnic Albanian while the city's minority of 100,000 Serbs is squeezed north of the river.

Movement is not restricted over the bridge connecting the two banks – which is patrolled by the UN and watched over by Nato troops – but few people cross to the other side.

And many in the city fear the imminent declaration of independence could harden this separation, leading to the de facto partition of Kosovo.

The uncertainly over Kosovo's status has also kept foreign business from investing in the country and created numerous logistical headaches for the region's two million people.

Its two cell networks use borrowed prefixes from Monaco and Slovenia, since Kosovo has no international dialing code of its own.

Exports are stymied because its certification and safety standards are not accepted by any international body. And its citizens carry travel documents issued by the UN mission in Kosovo (Unmik) rather than passports.

'Our own identity'

Many Kosovans hope that independence will end this limbo.

"When I had an opportunity to travel abroad, everywhere when they see it [travel document] they don't know what it is," said Vigan Kastrati, a 24-year-old businessman.

"It will be good for us to have our own identity and to have a passport that shows that."

The imminent declaration of independence will give Kosovo some new trappings of a state, such as a new, more inclusive national flag to replace the red and black Albanian one used by the region's majority population.

A Kosovo Serb stands by a poster of Vladimir Putin, the Russian president

But unless there is international consensus on recognising Kosovo's secession and immediate membership in the UN, ethnic Albanians may find independence a bumpy ride.

Under the terms of the partition plan devised by Martti Ahtisaari, the UN special envoy to Kosovo, Unmik is to be replaced by a new EU mission charged with supervising the new country rather than running it directly.

But Russia blocked approval of that plan in the UN Security Council, saying it would not accept Kosovo's secession from Serbia without Belgrade's approval.

As a result, Kosovo is moving forward with independence with the backing of the UN and many European countries, but without the UN's official stamp of approval.

Kosovan and international officials say Kosovo will adhere to the guidelines of the Ahtisaari plan after its declaration of independence, but many sticky legal questions remain unanswered.

Funding new infrastructure

The new state of Kosovo will likely need to borrow money to build new infrastructure and lure new investment and businesses.

The region is one of the poorest in Europe, with an unemployment rate estimated at between 35 and 50 per cent. It has almost no functioning industry and much of its existing infrastructure, such as its electricity grid, is aging and decrepit.

But it is unclear whether an independent Kosovo that is not universally recognised will be eligible to receive funds from international financial institutions like the World Bank and the International Monetary Fund or whether private lenders will provide loans.

Elinor Bajraktari, an economist with the EU component of the UN mission in Kosovo, told Al Jazeera a declaration of independence will likely have a positive impact because it will allow its leaders to focus on pressing issues.

"It will focus minds on the economy because unfortunately they have not been focused on things like the economy ... They have been focused on this political thing." he said.

Bajraktari says the departure of UNMIK itself, which is expected to leave 120 days after independence, could be a major shock for Kosovo's economy which is largely service-driven. The mission infuses 70 million euro a year into the local economy.

"When UNMIK took over in 1999, the process of transformation from a communist economy to a market economy had hardly begun."

"Kosovo has very dynamic demographics with very rapid increase in population," he said.

"It needs rapid economic growth to deal with the fact that there are 30,000 new people entering the job market every year."

Fearing renewed war

But much hinges on whether Kosovo's declaration of independence occurs without conflict.

The situation, especially in the Serb-dominated north, is tense. Nato peacekeepers have stepped up patrols and roadblocks in anticipation of this weekend's declaration and international and local leaders have called for calm.

On Friday, a blast in Mitrovica caused minimal damage to a building inhabited by two Serb families.

"There is a sort of fear," admitted Vjollca Rexhepi, as she sipped coffee at the Blue Sky café in central Pristina.